Coinbase is the world’s largest Bitcoin broker around. It is available to users in over 30 countries especially in the United States, the United Kingdom, and Brazil, which represent their largest customer base – and has more than 4 million customers around the world. It was founded in 2012 as part of Ycombinator, which means that Coinbase is also one of the oldest exchanges around.

Customers can purchase and sell Bitcoin with a connected bank account, SEPA transfer, Paypal account (selling only), Interac Online, and many more payment methods. This exchange has started out only as a broker (selling Bitcoins directly to customers). However, in May 2016 Coinbase started operating GDAX – A Bitcoin exchange, where Bitcoiners can trade Bitcoins with one another.

Coinbase currently allows its customers to purchase and sell three of the most popular cryptocurrencies – Bitcoin, Litecoin, and Ethereum. In the future, they plan to add more cryptocurrencies. However, if you want to buy other altcoins, you’ll currently have to look elsewhere.

Did you know: Coinbase asked Vitalik Buterin to come in for a chat in 2013 and they nearly offered him a job on their team. However, this didn’t happen because early the following year, Vitalik went on to create Ethereum.

Is Coinbase a Scam?

Anyone reading this Coinbase review is probably asking this question and straight answer is: Coinbase is definitely not a scam, but definitely has technical difficulties at times and a poor customer support. They’re a bit clunky and still a work in progress but the most convenient way to buy and sell Bitcoin we’ve found.

Is Coinbase Safe?

Coinbase is very safe. The company has invested heavily in insuring their vaults to minimize their losses. Also is the fact that the company is integrated with the major banking industries that also protect their investments.

Having received funds to the tune of US $ 75 million and above over the years since its conception, San Francisco based exchange goes, without doubt, one of the most secure virtual currency brokers in the world.

Coinbase is a Bitcoin company based in San Francisco, which means that is required to comply with US laws and regulations, at both a federal and state level. Here are some of the regulatory bodies, laws, and regulations that Coinbase complies with:

Coinbase is the world’s largest Bitcoin broker. It also offers an exchange, wallet, and developer API.

In this article we’ll review Coinbase and its brokerage, wallet and exchange.

Safe Keeping of Funds

This crypto exchange segregates customer funds from company operational funds. These customer funds are held in custodial bank accounts. This means they will not use funds of yours to operate their business. They also claim, “Even if Coinbase were to becomes insolvent, the funds held in the custodial bank accounts could not be claimed by Coinbase or its creditors. The Funds held in those accounts would be returnable to Coinbase’s customers.”

98% of customers’ cryptocurrency funds are stored in secure offline cold storage. These cryptocurrencies are held on multiple hardware wallets and paper wallets. The physical cryptocurrency wallets are then stored in vaults and safety deposit boxes around the world. These measures protect customers’ funds from being lost or stolen by hackers.

The remaining portion of cryptocurrency, that is stored online, is fully insured by a syndicate of Lloyd’s of London.

Coinbase Rapid Growth

Now that we answered the important “is Coinbase safe” question, it is time to move on and write a bit on history of this exchange. Coinbase popularity surged in 2017 – to give you an idea of the popularity behind this exchange let’s take a look into visitor statistics for Coinbase in 2017.

Monthly visits have been skyrocketing with a 70% jump in traffic between the month of October and November 2017. This figure currently stands at 65 million monthly visits. You may be saying: “yeah but this is because of the current bull market” – well get this: no other bitcoin exchange has been growing so fast in recent times. Furthermore, 45% of visits to Coinbase are from the USA, with Brazil second at 9% of total traffic, and the UK at 4%. Finally, at the time of writing this (March 2017) GDAX daily volume represents 15% of the whole bitcoin market volume.

How Does Coinbase Work?

To start off this Coinbase review, let’s do a short guide on Coinbase’s inner workings. Coinbase operates more like a bank than a broker. This is so as the company was the first to receive the virtual currency operation license. This is also because of major integration with the major Banks it is operating with has resulted in the adoption of most Banking laws. For this reason, Coinbase requires one to fill out an extensive personal information and monitor the accounts to prevent money laundering. This should not water down your spirit as their services are secure and guaranteed which is hard to come by in virtual currency.

Thanks to Coinbase’s simple interface, it is very easy for first-time buyers to buy Bitcoins.

The most popular payment methods for Coinbase customers are purchasing with a credit card or debit card. You can also use a bank transfer as a payment method.

At the bottom of this post you can find a full guide that shows you how to purchase on Coinbase using a credit card.

What Type of Payment Methods Can You Use on Coinbase? What about Coinbase Fees?

Coinbase offers its services in 32 countries and the payment methods available depend on your country.

Coinbase Shift Card

The Shift Card is a VISA debit card that is available to Coinbase users. Shift Cards allow Coinbase users in certain US States and Territories to spend the Bitcoin in their account in any place where VISA is accepted. Shift Cards cost an initial $10 but there are no transaction fees on domestic transaction nor any fees associated with the exchange of Bitcoin to USD.

Coinbase Buying / Selling Limits and Liquidity

Once your Coinbase account is set up, you are able to purchase a small amount of Bitcoins until you raise your limit. Buy and sell limits can vary by payment method, user location, and verification status. For example, fully verified US customers may get these weekly limits fairly easily:

$50 Buy through Credit/Debit Card

$5,000 Buy through Bank Account

$50,000 Sell

If these limits don’t meet your needs, you can apply for higher limits. It’s important to note that your limits for instant buys, such as credit card buys, may not be able to be increased.

European customers may at any time have a maximum of €30,000 in their account.

Bank Transfer: When using bank transfer, US customers will receive their Bitcoins 5 business days from placing an order. If a credit card is added to the account as a backup payment method, then instant buy becomes possible.

Instant buy will allow fully verified users to purchase up to $1,000 worth of Bitcoin per week, while level 2 users are able to instantly purchase up to $100 worth of Bitcoin per week.

Credit/Debit Card: If you use a debit or credit card, delivery of Bitcoins is immediate once you complete your ID verification.

Europe

European customers who are paying with SEPA transfer will receive their Bitcoins within 1-3 days after placing their order.

Canada

Canadian EFT buys take 4 days to complete, while Interac Online buys are instant!

Unfortunately, Coinbase provides miserable customer support services. Not much to comment on that, tickets go unanswered for weeks.

Coinbase “Community” can be used to ask questions and get support help, and you will probably receive responses from support within 24-72 hours.

Past Problems

There have been reports that Coinbase tracks how their users spend their Bitcoins. – Coinbase can and will track how their users spend their Bitcoins. They may also freeze or close your account if you deal with selling stuff on the darknet, gambling, adult services and other shady business.

With the Coinbase wallet, your Bitcoins are controlled by the company. You have to trust that they keep your coins secure, and you also have to keep your Coinbase login and account password safe.

Coinbase is a VC backed company with over $100 million in funding. That’s why it’s likely they have a very strong security setup. However, the point of Bitcoin is that customers have the ability to control their own money, so it’s highly recommended to move your Bitcoins into a wallet you control after you buy.

It’s important to note that Coinbase has been known to track where their users send their cryptocurrency, and they can shut down your account and block access to your funds at any time.

Coinbase Vault

Coinbase recently introduced the Vault feature. This feature allows you to “share an account” with 2 or more users, which means that if a user adds two approvers to his vault, both must confirm that the withdrawal is valid before it processes.

Also transactions have a 48 hour delay for added protection. This allows you to catch an unauthorized transaction in time.

However, the vault account is just an added security layer in case someone hacks your password, so using it doesn’t mean you personally control your Bitcoin wallet. It’s still hosted on Coinbase and it can be shut down by Coinbase at anytime.

Multisig Vault

Coinbase understands that many users want complete control over their funds, so if you want total control of your wallet you can use a multisig vault.

Its multi-sig vault is a 2 of 3 wallet, where one key is held by the account holder, Coinbase has one key, and the third key is shared. You’ll need 2 out of 3 keys in order to conduct an action on the wallet. So even if Coinbase goes down, you should still be able to move funds from your wallet because you still have both the shared key and your own key.

Your name, email, phone number and many other personal information are required. Coinbase knows your balance and addresses at all times. The interesting thing is that they can connect this with your identity and IP address. That’s why you have to trust Coinbase’s nodes to verify transaction data.

Shift Payments released a debit card. This card connects to your Coinbase account and uses your Coinbase balance as the debit card’s source of funds. This allows you to spend your Bitcoins at any merchant accepting Visa.

Coinbase Purchasing Tutorial (Debit Card / Credit Card)

Create an account on Coinbase, confirm your personal details and login. It’s important to note that you may be asked to upload a scan of ID

Go to account settings

Go to the top right corner, click on your name and you should see a drop-down menu where you can click “Settings”. Then click “Payment Methods” on the menu at the top. There should be something that looks like this:

Navigate to the right corner and click on “Add Payment Method”.

Click “Credit/Debit Card” tab

4.Enter your Credit/Debit Card Information

It’s important to note that Coinbase currently only accepts MasterCard and Visa credit/debit cards.

Confirmation

You should see a confirmation like the one on the image below, and if you do, your credit/debit card has been successfully added!

Purchase Bitcoins!

Go to the buy page and there should be a widget that looks like the image below:

Enter the amount you want to purchase. Then click “Buy Bitcoin Instantly” and your coins will then be delivered to your Coinbase wallet!

Note: This process may have changed slightly by the time you’re signing up to Coinbase because they continuously make small adjustments to their design and sign up process.

Frequently Asked Questions (FAQ)

Are There Cash Advance Fees for Purchasing Bitcoins on Coinbase with a Credit Card?

Purchasing Bitcoins on Coinbase with a credit card should not result in any cash advance fees. However, be sure to contact Coinbase support if this happens to you.

Is it Safe to Link My Bank Account to Coinbase?

Coinbase is a regulated company and is backed by major US investors. It holds licenses in all districts in which it operates, which means that is not a scam.

So, it’s safe to link your bank account to Coinbase. However, that does not mean you should ever store your Bitcoins with Coinbase.

Can You Purchase Bitcoins with PayPal on Coinbase?

Coinbase only accepts the payment methods listed above, which means that it does not accept PayPal.

Why does Coinbase have a bad rapport?

If you have been a regular in Reddit and facebook bitcoin-related forums; you will have seen a lot of negatives regarding Coinbase. Why is this? The answer lies in its operation.

First culprit – the banking laws. Banking laws of all countries are against money laundering. Coinbase requires one to fully disclose all personal information before opening an account – the KYC obligation all banks and financial institutions have. This does not sit well with most people. At least not the ones purchasing Bitcoins.

Does Coinbase hold my private keys?

Yes, they do. After purchasing the Bitcoins, Coinbase keeps the Private Keys while you get the public keys. This means that your purchases are monitored keenly by the company and any wrong move results in the freezing and closure of the account.

What about customer complaints about Coinbase I read on forums?

There have been customers whose accounts were erroneously debited and that took some time before the account was reconciled. This is after much complaining and waste of time. They take their time to reply your email.

There have also been customers whose accounts were frozen and written off for trading large sums of money. This was also after trying to exchange Bitcoins for Fiat after they gained value on LocalBitcoins (LBC). The reason for this is that they consider such individuals high risk.

How to transfer coins from Coinbase to other exchanges like Binance, Kucoin, Bittrex?

Log in to your account on of those exchanges, go to your respective coin wallet and generate an address. Then copy that address and go back to Coinbase, click on withdraw coins and paste the address from the other exchange.

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Warning!!!! Dozens of Wire Transfers missing from Coinbase!
Hundred of Thousands to Millions of Dollars in Wire Transfers missing from Coinbase Accounts and not returned to Customers.
Before wiring anything please see the Coinbase Reddit Forum!

Coinbase is charging a lot more then what list here. Right now you will loose 10% of purchase of Bitcoins through CB fees. They are charging close to 5% for both the purchase and sending. Not even close to the bs number of 1.49%. All CB transactions are held for 72 hours and are not instant as advertised. A Customer Service that do anything for you is NON- EXISTENT. I have had everything I own verified. My cell phone, email, my computer, my drivers license and bank accounts yet they hold the transaction for 72 hours and there is nothing you can do to change it. Coinbase is a complete joke and should be taken down by authorities for bold face lies.

Coinbase… beware… they were to deposit my money into my bank 28 days ago (as of Feb 17th). Still no deposit. Wire transfers missing, bank deposits missing. They have a great business model. Withdraw money from your bank and then don’t return it when asked it. This is not even discussing there insane fees… used beware

Mafia. I invested 1700 Euro in February without any problem. Bitcoin suddenly dropped and I deposited 1700 Euro more a week later. After nearly 2 weeks of trying to call hopelessly I received an email from somebody called John asking for transaction details. The money was taken out of my bank account. I sent that and now almost a week later, no contact at all. I was sceptical about crypto but I feel I am dealing with the mafia here. Decide if all this is worth the potential stress for yourself.

I’ve had nothing but good experiences (thankfully) with Coinbase, although I’m not exactly a heavy buyer and seller of crypto. I will say though that back in 2013 I panic sold 5 figures worth of Bitcoin when the price dropped, and I DID get the money. So people who say if you sell a large amount on Coinbase they’ll just steal your money or whatever, that’s not true.

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